Many sponsors of smaller 401k plans are being guided toward integrating their recordkeeper's stable-value fund into these target-date strategies, effectively lowering administrative costs. While this reduction in fees is beneficial for participants, the influence of cost-sharing arrangements on target-date managers' allocation decisions can lead to significant trade-offs. The discussion here delves into the factors driving this trend, its prevalence, and the implications of these trade-offs for investors.
As we approach 2026, plan sponsors must navigate a changing environment characterized by new regulations, fiduciary risks, evolving plan designs, and shifting participant expectations. This period reflects ongoing change, intensified by urgency. The discussion here highlights key trends expected to influence retirement plans in the coming year.
In educational seminars, attendees often inquire about a template for a retirement plan audit Request for Proposal. After emphasizing the importance of selecting a qualified plan auditor and outlining essential items and criteria for evaluation, the author provides an RFP outline that highlights key components of an effective retirement plan audit. Additionally, a customizable RFP template is provided to accommodate the specific requirements of each plan.
A study by J.P. Morgan Asset Management reveals that nearly half of retirement plan participants are burdened by credit card debt, leading many to take loans against their future savings. The "Retirement by the Numbers" report analyzed data from 16,000 defined contribution plans and over 12 million participants, highlighting the correlation between high credit card balances and lower contribution rates and account balances. This debt impacts retirement readiness, decreasing it by up to 40% for older participants.
The DOL is set to issue guidance that may change how retirement plan participants receive benefit statements. Following the SECURE 2.0 Act of 2022, the proposed regulations will mandate that defined contribution plans provide at least one paper benefit statement annually, unless participants opt out. Additionally, defined benefit plans will need to provide paper statements at least once every three years. While electronic delivery will remain the primary method of communication, this move restores a guaranteed role for paper statements.
Starting in 2026, individuals aged 50 and older who earned at least $150,000 in the previous year will be required to make catch-up contributions to their 401k, 403b, and 457b plans as Roth contributions. While this change may increase immediate tax revenue for the federal government, it introduces significant complexity for recordkeeping firms, as they navigate a new compliance landscape created by these requirements. Plan sponsors and payroll providers will likely take the initial steps to adapt, but the burden of compliance will increasingly fall on recordkeepers.
On December 11, President Trump issued an executive order titled "Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors." The order expresses concern that major proxy advisory firms have excessive influence over corporate governance, shareholder proposals, and investment practices, which they allegedly use to promote politically driven agendas regarding diversity, equity, and inclusion, as well as environmental, social, and governance issues. The executive order seeks to enhance federal oversight of the proxy advisor industry.
On December 4, 2025, the U.S. Treasury Department and IRS released Notice 2025-60, which includes the Required Amendments List for 2025 concerning qualified defined benefit and defined contribution plans, as well as 403b plans. This RA List details the amendments that must be made in response to legislative and regulatory changes applicable to both individually designed and pre-approved plans. Each year's RA List consists of updates for which the IRS has issued guidance or does not anticipate needing guidance, and it outlines compliance requirements for the calendar year in which it is published.
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Collected Wisdom™
Our researchers look for what they think are some of the better resources available to assist you in administering your plan or helping your clients. We group these resources in our COLLECTED WISDOM™ topics to make it easy for you to locate the information you need. Each item in a category contains a summary and date of when it was placed in the group.
We also maintain some older material in these collections for perspective and context.
